First Time Buyers
Whether you need help as a first time buyer, buying a new home or negotiating a mortgage, Brick2Brick Mortgage Solutions can manage all your mortgage needs.
Buying your first property is very exciting but can also be daunting as normally people don’t have an idea of what to do or what happens next. This is why here is Brick2Brick we will guide you through the process ensuring you are kept fully informed of what is happening along your journey. You’ll be classified as a first-time buyer if you – and anyone you are buying with – are purchasing your first residential property.
A few years back the government had agreed to underwrite a part of the loan.
GREAT NEWS! They have done it again!
This is under the 95% mortgage scheme where Eligibility criteria is in place. So it is only available on property purchases worth up to £600,000. But this scheme has already helped thousands of people into home ownership.
Credit file:
Checking your credit file is a good thing to do before you approach ourselves so that you know if there are any unknown issues and that the information the credit reference agencies have on the credit file about you is correct.
A great place to look for this is Check MY File. You get a report showing results from 4 agency’s in one. You can cancel at any point with no charge for this. You can sign up for a free month trial then after this period you will be charged a monthly fee (not charged if cancelled before the trial period has ended. CLICK HERE TO OBTAIN THE REPORT:
https://www.checkmyfile.com/?ref=paulcollinson1&cbap=1
Then we can have a chat about the potential of what you could borrow based on some information such as income and commitments.
As a deposit we have mentioned that currently on the market are 95% loan to value products which means you only need a 5% deposit. The smaller the deposit then the higher the interest rate will be as this means a higher risk to the lender. But saying that, most first time buyers don’t have much more than this in order to get themselves onto the property ladder.
Here at Brick2Brick we see customers of ours saving all of the deposit for many years and we also see many who have gifted deposits from family members like parents or grandparents. Again, there may be potential tax issues with a gifted deposit so please do seek specialist advice. We are specialist in mortgage advice but not tax advice.
There are going to be extra costs which are likely to include:
Stamp Duty
Conveyancing Services (we can recommend 8 and our system picks the quickest one at that time)
Home Insurance
You may also need to buy essentials for the property such as appliances and furniture.
A couple of schemes to help first-time buyers?
Help to Buy: Equity Loan
If you have saved a deposit of at least 5%, you might be able to use the government’s Help to Buy equity loan scheme – This has been around for a while but now there is a new version of which was launched in April 2021.
This scheme is available for first-time buyers in England, the scheme offers loans of up to 20% but up to 40% if you’re in London – of the value of a new-build home costing up to £600,000. The scheme is open to first-time buyers and those looking to move up the ladder.
The loan does not have any interest for the first five years, then you need to be aware that after this you’ll be charged 1.75% interest on the loan amount. Then after that, the amount of interest you pay will then rise in line with inflation, plus 2%. Just be aware that this will happen and also that the government will have the increased amount of equity in their share if the property value increases. Some people are fortunate enough or have become fortunate enough within the 5 years to be able to remortgage to pay the equity loan off.
Shared ownership
If you’re a first-time buyer you could be eligible for shared ownership. You need to be earning less than £80,000 a year (or £90,000 in London), This is where you buy a percentage of a property and then pay rent on the rest.
